Moody’s affirms Malaysia's A3 rating; stable outlook

Fitch Ratings has affirmed Malaysia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'A-' with a Stable Outlook.

KUALA LUMPUR: Moody's Investors Service has affirmed the Government of Malaysia's local and foreign currency issuer and senior unsecured bond ratings at A3. The outlook is maintained at stable.

It said late Thursday the key drivers underpinning the A3 rating and stable outlook are:

1. Moody's expectation that the government's debt burden will remain high but broadly stable

2. The relatively high exposure of the economy and financial system to a tightening in external financing, as reflected in low reserve coverage of external payments, although balanced by several mitigating features; and

3. Malaysia's healthy and resilient growth prospects.

Moody's has also affirmed the A3 senior unsecured ratings to the US dollar trust certificates issued by Malaysia Sovereign Sukuk Berhad and Malaysia Sukuk Global Bhd, special purpose vehicles established by the Government of Malaysia. 

These trust certificates are considered direct obligations of the Malaysian government and their ratings automatically reflect changes to Malaysia's sovereign rating.

Moody's has also affirmed the instrument ratings on senior unsecured debt issued by Khazanah Nasional Berhad at A3. The Malaysian government guarantees these instruments.

Malaysia's long-term foreign currency (FC) bond ceiling is unchanged at A1 and its long-term FC deposit ceiling is A3. Malaysia's short-term FC bond and deposit ceilings are also unchanged at P-1 and P-2 respectively.

These ceilings act as a cap on ratings that can be assigned to the FC obligations of entities other than the government that are domiciled in the country.

The long-term local currency (LC) bond and deposit country ceilings are unchanged at A1.